US funds not impressed with Man Utd’s float

MANCHESTER United is struggling to find supporters for its initial public offering in the US, with potential investors put off by the huge cost of paying players and the club’s debt pile.

The club revealed its float earlier this month, but fund managers who have looked at its preliminary prospectus have been either negative or lukewarm on the prospect of buying shares in the club, which is controlled by the Glazer family.

They say Manchester United faces significant financial risks given its £423m of debt, and the structure puts its fans at odds with investors.

“With a sports franchise, it’s a constant tug of war between player salaries cost and the rest of the operation,” said Wallace Weitz, president and portfolio manager at Weitz Funds.

Manchester United, which shelved a Hong Kong listing last year, declined to comment and the Glazers could not be reached.

The Glazers’ plans for a dual share structure allow them to retain almost complete control even after selling a large stake. It also makes a dividend payout unlikely.

“The deal is a strong vanity play in terms of being part of a winning franchise but whether or not that mystique around the team translates to money for shareholders I doubt it,” said Jeff Sica, chief investment officer of Sica Wealth Management.